The plague of zombie foreclosures – abandoned homes left to rot mid-foreclosure – is still haunting parts of America, but the numbers remain near record lows, according to ATTOM’s latest real estate data. Just one in every 14,700 homes in the U.S. sits vacant due to foreclosure, a figure that barely budged from last quarter and has dropped 3% from last year.
"You'd have to take a very long walk through most U.S. communities to come across even one zombie foreclosure—and even then, you might not find any," Rob Barber, CEO of ATTOM said. "This marks a significant turnaround from the period following the Great Recession in the late 2000s, when a collapsing housing market and abandoned properties posed serious risks to many neighborhoods. The latest figures highlight one of the many benefits of the nation's prolonged housing market boom for both homeowners and renters alike."
Foreclosures Stay Down
While the number of homes in foreclosure (totaling 212,268 this quarter) is still a big number, it’s down 12.6% from a year ago. That’s five straight quarters of decline, a stark contrast to the surge in foreclosure cases that followed the end of pandemic-era protections in 2021.
This is due to the fact that homeowners have more equity than ever, thanks to a decade-plus of rising home prices. Banks are also moving properties through the system faster, keeping homes from sitting vacant.
Still, some foreclosures turn into zombies. About 7,094 properties have been abandoned by their owners, either because they saw the writing on the wall or just walked away. That number barely changed from last quarter, but it’s slightly better than the 7,338 recorded at this time last year.
Winners and Losers
The biggest zombie foreclosure drops in the past year came in states that had at least 50 of them last year. In Maryland, the number of zombie properties decreased by 38%, dropping from 104 to 65. In Georgia, there was a 35% decrease, bringing the total down from 81 to 53. California experienced a 30% drop, with numbers falling from 310 to 217. New Jersey saw a 23% reduction, bringing the total from 260 to 199. In Ohio, the number of zombie foreclosures declined by 16%, going from 597 to 503.
But in other states, zombie numbers are creeping up. In Missouri, the number of zombie properties increased by 85%, rising from 27 to 50. Michigan saw a 51% increase, climbing from 55 to 83. South Carolina experienced a 31% jump, with numbers going from 74 to 97. In Indiana, the count rose by 28%, moving from 215 to 276. Kansas saw a 26% increase, with zombie foreclosures growing from 69 to 87.
Vacant Homes Still Linger in Some Places
The overall U.S. vacancy rate is at 1.3%, and its barely moved in three years. But some states still have more empty homes than others. Oklahoma has the highest vacancy rate, standing at 2.41%. Kansas follows closely with a rate of 2.34%. Missouri's vacancy rate is 2.18%. Alabama has a vacancy rate of 2.16%. West Virginia rounds out the list with a vacancy rate of 2.09%.
Meanwhile, some states keep their vacancy rates impressively low. New Hampshire has the lowest vacancy rate at 0.34%. Vermont follows with a rate of 0.41%. New Jersey maintains a vacancy rate of 0.49%. Idaho has a rate of 0.52%. Connecticut has a low vacancy rate of 0.56%.
Some metro areas are still struggling with zombie properties, particularly in the Midwest. Peoria, Illinois, has the highest percentage of zombie foreclosures, with 15.5% of foreclosed properties sitting vacant. Wichita, Kansas, follows with a rate of 12.5%. Kansas City, Missouri, has 10.9% of foreclosures classified as zombie properties. Toledo, Ohio, sees 10.6% of its foreclosures abandoned. Fort Wayne, Indiana, has a rate of 10%.
Even in major metro areas with massive housing markets, some cities can’t shake their zombie problem. In places with at least 500,000 homes, Cleveland, Ohio, has the highest zombie foreclosure rate at 9.1%. St. Louis, Missouri, follows with a rate of 8.9%. Indianapolis, Indiana, sees 8.5% of its foreclosures sitting vacant. Detroit, Michigan, has a zombie foreclosure rate of 6.1%.
Investor-Owned Homes and Bank-Owned Zombies
Investors own a whopping 24.8 million homes in the U.S., and 877,800 of them sit vacant -- about 3.5%. Indiana has the highest share of vacant investor-owned homes, with 6.9% of such properties sitting empty. Illinois and Alabama each report a 6% vacancy rate for investor-owned homes. In Oklahoma, 5.9% of investor-owned homes are vacant. Kansas also has a vacancy rate of 5.9% for investor-owned homes.
Meanwhile, bank-owned properties -- those that have gone through foreclosure but haven’t been sold yet -- aren’t immune to vacancy issues either. About 14% of the 12,300 bank-owned homes in the U.S. are empty. In Kansas, 37.7% of bank-owned homes are vacant. Indiana follows with a vacancy rate of 27.6%. Missouri reports that 23.9% of its bank-owned homes are vacant. Ohio has a vacancy rate of 22.4% for bank-owned homes. Illinois rounds out the top five, with 22% of its bank-owned homes sitting empty.
